Oil prices: An analysis of Andrew Walker, a correspondent for the BBC's Economics

Saudi man in front of the oil price on the stock exchange in RiyadhImage copyrightAP
Image captionSaudi Arabia is the largest exporter in the world crude
Oil has made Saudi Arabia a major economic factor. But it comes at a price. The short-term challenge is the volatile price of crude oil, which is currently less than half as much as it was in mid-2014. Saudi Arabia has deep pockets.

It will not work go to the International Monetary Fund for financial aid, something different oil exporter, Angola, did. But the Saudi reserves are blurring and almost three-quarters of public revenues on the basis of oil price decline makes itself felt.

In the long-term international efforts to combat climate change creates enormous uncertainty regarding oil demand in the future. Oil loses its dominance in the transport fuel market in the next few years, but the prospect of more to come is unknown.

Thus, Saudi Arabia should become less dependent on oil for government revenue and jobs and incomes of Saudi citizens.

Oil prices are still less than half the peak of $ 115 a barrel seen in June 2014, but the prince said that the reform will go ahead regardless of the price.

"The vision has nothing to do with the price of crude oil," he said.

"If the price of oil goes back up it will greatly support the vision, but he does not need the high prices. We can deal with the lowest prices possible."

Deputy Crown Prince Mohammed bin Salman depicted in the office meetingImage copyrightReuters
Image captionThe powerful and influential Deputy Crown Prince Mohammed bin Salman gave detailed information about the reform plan, known as Vision 2030
In an interview with Bloomberg last week, Prince Mohammed said taxes on luxury goods and sugary drinks can also be administered. However, he said that it is important that the program will not leave poor countries worse off.

Prince is the second in line to the Saudi throne, and also serves as defense minister.

Huge oil revenues allowed the Saudi government to offer generous subsidies for utility services for the population. But some of them have been reduced in the past year due to the fall in oil prices.

Over the weekend, King Salman dismissed minister of water on a background of resentment at higher prices for utilities.

Saudi slump

Even rich Saudi Arabia is under pressure from tumbling oil prices, and announced a series of economic reforms

72%

revenues come from oil

$ 98bn budget deficit in 2015
an increase of 80% in gasoline prices in the past year in the country
$ 2.5tn size of the state oil giant Aramco
$ 2tn potential sovereign wealth fund worth Saudis created